I have posted a few times previous on this but I have just had a reply back from my IP which concerns me do is like a few opinions please.
My wife and I thought we were due to finish our IVA in month 60 last year. We went through the process of trying to remortgage. Our total equity was 29,654 pounds but had 6,108 pounds available to the creditors after the 85% LTV had been calculated and the mortgage taken off. We were unable to remortgage. However we were then informed that there had been an error and due to modification made at the original meeting our IVA was 72 months and a remortgage attempt should be made in month 66. This year whilst getting ready to redo the remortgage process I discovered that the modification is only on my agreement and not my wife's. We have written to The IP to query whether my wife should have been paying for an extra 12 months in the first place, and whether my IVA should be further extended as my share of the equity is less than 5000 pounds. They have written back and confirmed that the equity available to creditors this year is 8,348 pounds.
I thought that the equity available to creditors should be split between my wife and I which means that she should not have had to extend my payments last year and I needn�t this year. Their reply is this, which I don�t understand and has never been explained to us before today:
�The modifications put forward by creditors created an inconsistency in the interlocking arrangements in that your arrangement was extended by 12 months, which not only resulted in additional payments being made in relation to your creditors only, but also disharmonised the valuation of your and your wife�s respective equity in the matrimonial home. This is unusual but not unworkable, it merely means that the equity would be treated as if it were a sole arrangement rather than interlocking.�
Is this correct and shouldn�t this have been outlined to us before? It's not in anything either of us has signed.
I don't agree with your IP --- they cannot have their cake and eat it !!
The way I see it is that the should treat the arrangements as separate on the grounds of this "disharmony". This means that your wife is due a refund of her share of the payments, or that the last 12 months are treated as her extension due to being unable to remortgage and also that the equity provisions be treated as separate in that you each have half of the available equity and you are therefore deminimis and should not have to extend again.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
I agree with Foggy. This should have been picked up at the meeting of creditors and the Chairman's Report would have included any extension. The modifications would have had to have been explained to you and agreed so it seems odd that this only raised its head recently.
Your wife's overpayments should be returned to her as her IVA should have closed a year ago. Then when the equity calculation was done for you it could only be based on your share and therefore de minimis and no further extension would be required.
Ask for a face to face meeting with your IP and a full record of the meeting of creditors. If the IP cannot sort this out to your satisfaction you have the right to take the matter further.
A possible compromise, with your wife's agreement, is to offer the clear overpayment into her IVA as a settlement for any equity that you may be asked for ?
Paul. We believe from the contents of this query that we are supervising your IVA. You have not fully detailed the contents of our letter or the exact terms of your IVA (as no one would expect in a public forum) but we believe that under the terms we have acted correctly on your, and your creditors', behalf.
We do not feel able to provide a detailed explanation as to our logic behind our letter here but are more than happy to have a meeting where we can go through the process which will hopefully allow you to see how we came to the current position.
Please call our office to arrange this.
James Kaye and Nick Morgan, Insolvency Practitioners with over 30 years combined experience.
Thanks NTF, I will be in touch in due course however for the benefit of the forum and the people that have taken the time to reply to my post it would be good if you could give a genaral explanation here to your thinking behind this.
Our IP has attempted to justify their decisions to extend mine and my wife’s IVA’s. We are still unsure that their reasoning is correct. They agree that my wife’s IVA was due to end in November last year. They agree her share in the equity is £14,827 and the equity to creditors is quoted at £6,104 which is between us. They say as she could not obtain a re-mortgage she had to make an additional 12 months payments. But then they say “however she is in interlocking arrangement and your (my) proposal has been extended for 12 months my wife is obtaining £14,827 of equity for the payments that you were making in any event.” I think that the equity to creditors should have been valued at £3052, and therefore the de minimus clause should’ve been triggered.
In addition they are planning to extend my payments until 2016 in lieu of equity. They quote my equity available to creditors is £8,348. I have argued it is half of this and that the de minimus clause should be in effect.
The fact that having interlocking IVA’s with different end date is so rare seems have confused the issue even further. I hope someone can shed some further light on this and what we can do next if we have a case.
I'm not an expert but NTF do seem to be trying to find an equitable resolution.
Even if you had both been in individual arrangements but 1 taken out slightly after the other you could have faced the same situation.
IVA started March 2011, Completed March 2016 and certificate issued 11 days after final payment. It was not always easy but then some of the best decisions aren't.
